#
How to Calculate VAT

by Kevin

(Pretoria, South Africa)

**Q: How do I calculate the VAT included in the debtor and creditor control accounts?**

A: Control accounts for debtors and creditors are the full amounts including VAT (Value-Added Tax) that are owed from one party to another.

Assuming VAT is 14%, to calculate the **VAT portion** you take the total of debtors or creditors and multiply by 14/114.

So, for example, if our total debtors amount owing to the business is R228 (228 Rand - South African currency), then we do the following:

**R228 x 14/114**

= R28

The actual sales figure here - excluding VAT - could be calculated in 2 ways:

1) We could just take the total of the debtors, which includes VAT, and subtract the VAT figure we just calculated:

**R228 - R28**

= R200

2) Or we could take the total debtors figure and multiply this by 100/114:

**R228 x 100/114**

= R200

Hope that helps and that now you understand how to calculate VAT!

And see below in the comments for a few more questions I answered with examples of calculating VAT...

- Michael Celender

Accounting Basic for Students

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